Aetna apologizes for failure to abide by $1 billion Medicaid contract in Kansas

Tim Carpenter TimVCarpenter

Tuesday

Aug 27, 2019 at 5:55 PM

A top Aetna insurance company executive implored Kansas lawmakers Tuesday to accept an apology for failure to abide by provisions of a $1 billion annual contract to serve disabled, elderly and other people enrolled in the state's Medicaid program.

Officials said Aetna Better Health, the company's Kansas subsidiary, was striving to broaden its network of providers, resolve problems with a provider credentialing backlog, correct inaccurate data submitted to the state and fix issues with paying claims. Aetna, headquartered in Hartford, Conn., is among three firms operating as managed-care providers of Medicaid in Kansas.

"I thought I would sort of address the elephant in the room," Randy Hyun, senior vice president for Aetna Medicaid, told a House and Senate committee responsible for oversight of Medicaid. "As the leader of our business, I take full accountability for where we are."

Hyun said at the Capitol that feedback to the company from providers and state officials, and "some of the things we've seen internally, have been extremely disappointing."

"I want to apologize for not living up to expectations that I've had for our plan," he said. "We preach operational excellence, and we certainly have not demonstrated that to you. I do want to acknowledge that and apologize, because that's happened under my watch. I'm accountable for it and I'm accountable, more importantly, for fixing it."

The Kansas Department of Health and Environment sent a notice of noncompliance July 24 to Aetna. It is one of the three managed-care insurance companies hired by the state to operate KanCare, the state's privatized Medicaid system.

Aetna submitted a plan to correct inadequacies Aug. 6, which was rejected by KDHE because it inadequately addressed chronic complaints.

"Quite frankly we were not satisfied with the corrective-action plan that was given to us," said Adam Proffitt, the state's Medicaid director at KDHE. "We felt it lacked the necessary detail that showed they were going to get back into compliance."

Proffitt said Aetna didn't make a good-faith effort to identify root causes of failure to live up to the $1 billion contract and service to 28 percent, or about 100,000, of more than 400,000 Kansas low-income children and adults, people with disabilities, seniors in long-term care and pregnant women in the privatized Medicaid system.

"We have gone back and forth and expressed our concerns over the corrective action plan," Proffitt said. "The burden of proof though is going to be on them. I've been encouraged with the conversations that we've had so far with their new leadership team."

He said the state's Medicaid program would be stronger if there were three companies operating the system but said KDHE wouldn't allow the problems to fester for years.

In response to rejection of the initial corrective plan, Aetna removed Kansas CEO Keith Wisdom and promised to put in place administrators with extensive experience with Medicaid. The company installed an interim CEO of the Aetna division in Kansas and repositioned Deb Bacon a regional vice president at Aetna Medicaid, to focus on issues in Kansas.

"I made some decisions to change out the management team, which was an important decision for me," Hyun said. "As we move forward, I wanted to make sure I had the best team possible to come in an manage and remediate the situation and get us moving in the right direction."

Aetna operates Medicaid programs in Kansas and 13 other states. It has 400,000 Medicare and commercial customers in Kansas, but was new this year to the KanCare contract after the company replaced Amerigroup, which lost out on the bidding process.

The two companies remaining with KanCare are Kansas UnitedHealthcare and Sunflower Health Plan, which grappled with management problems after the state privatized Medicaid in 2013 under the leadership of Gov. Sam Brownback.

Rep. Brenda Landwehr, a Wichita Republican on the oversight committee, said Aetna's previous contract work with Medicaid in California, Texas, Illinois, Florida, Virginia and other states should have helped it avoid struggles in Kansas.

"I guess the problem I'm having is ... this isn't their first rodeo," she said.

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